Gyeonggi Province Pushes "Choi Eunsun Prevention Act" to Curb Non-Tax Revenue Delinquency

Gyeonggi Province is pushing ahead with what it is tentatively calling the "Choi Eunsun Prevention Act."

The core of the initiative is to promote amendments to two laws - the Act on the Collection, Etc. of Local Administrative Penalties and Charges and the Real Name Financial Transactions and Confidentiality Act - so that exit bans, additional charges, and financial information inquiries can be imposed on high-amount delinquent payers of non-tax revenue, in order to prevent intentional non-payment of such non-tax revenue items as in the case of Ms. Choi Eunsun, including administrative fines and development charges.

Gyeonggi Province has already drawn up draft amendments to the relevant laws and submitted them to the central government.

Gyeonggi Governor Kim Dongyeon said, "The Choi Eunsun Prevention Act represents Gyeonggi Province's strong determination to eradicate from this land the second and third 'Choi Eunsuns' who live nonchalantly despite being in arrears on huge amounts of non-tax revenue," adding, "We will overhaul laws and systems to fundamentally root this out."

Non-tax revenue refers to revenue other than taxes that is imposed for public purposes, such as administrative fines for legal violations or development charges arising from development projects.

The problem is that under the current system, sanctions are insufficient when some delinquent payers fail to pay, hide their assets, or move overseas.

In 2013, it was revealed that Ms. Choi violated the law by purchasing land in Dochon-dong, Jungwon-gu, Seongnam City under a borrowed name through a title trust agreement, and an administrative fine was imposed.

Because she failed to pay the 2.5 billion won in arrears by the final payment deadline of December 15 last year, Gyeonggi Province is currently proceeding with a public auction of one of her properties, a building and land located at 502-22 Amsa-dong, Gangdong-gu, Seoul.

As cases of delinquency on administrative fines for violations of the Real Name Real Estate Act and on development-related charges increase, some delinquent payers continue to evade collection by hiding deposits, remitting funds overseas, and repeatedly traveling abroad.

In response, Gyeonggi Province has prepared what is commonly referred to as the "Choi Eunsun Prevention Act to Enhance the Effectiveness of Non-Tax Revenue Collection" and submitted it to the central government. The province is also continuing discussions with National Assembly member Yang Bounam to push for the related legal amendments.

The first component of the Choi Eunsun Prevention Act is to amend the Act on the Collection, Etc. of Local Administrative Penalties and Charges to introduce provisions for exit bans and additional charges on high-amount delinquent payers.

Regarding exit bans, under current law, those who are in arrears above a certain amount in national or local taxes can be subject to an exit ban, but delinquent payers of non-tax revenue can travel abroad without any restrictions.

Gyeonggi Province takes the position that, to establish a fair tax system, provisions must be newly established to allow exit bans on non-tax revenue delinquent payers who are in arrears above a certain amount.

The province has proposed establishing a legal basis that would allow the heads of local governments to request exit bans from the Ministry of Justice when non-tax revenue arrears are 30 million won or more. This is the same threshold applied to delinquent local tax payers.

An additional charge is an extra amount imposed when payment is not made by the prescribed deadline. While there are provisions for additional charges on national and local taxes, whether additional charges apply to non-tax revenue depends on each individual law, resulting in a fragmented system by item. In particular, for non-tax revenue with a strong sanctioning nature for legal violations, such as administrative fines or enforcement fines, there are often no additional charges, leading to many cases where payment is intentionally delayed.

Accordingly, Gyeonggi Province has proposed a plan to systematize the imposition of additional charges by dividing them into two types according to the nature of the non-tax revenue. First, for administrative fines and enforcement fines with a strong sanctioning nature for legal violations, such as violations of the Real Name Real Estate Act or the Building Act, the proposal calls for applying a higher additional charge rate.

Second, for burden-type charges with the nature of delayed payment, such as development charges and metropolitan transportation facility charges, where payment is determined at the start of the project but is then left unpaid, the province has proposed applying additional charges at the same level as those for local taxes.

The second component of the Choi Eunsun Prevention Act is to expand access to financial information through an amendment to the Real Name Financial Transactions and Confidentiality Act. Currently, financial information such as deposits and records of foreign remittances can only be accessed when a person is in arrears on national or local taxes. When a person is in arrears on non-tax revenue, there is no legal basis to track financial assets, even if it is the same delinquent payer.

Gyeonggi Provincial Government

Therefore, when some delinquent payers hide deposits or send money overseas, it is difficult to identify and collect those funds.

Gyeonggi Province holds the position that the Real Name Financial Transactions Act should be amended so that financial information can also be checked for non-tax revenue delinquent payers, just as it is for national and local tax delinquent payers.

An official from Gyeonggi Province said, "During the 100-Day Operation to Eliminate High-Amount Delinquent Payers that we carried out last year, we confirmed that the system for disposition on arrears in the field of non-tax revenue is inadequate," adding, "We will establish a three-dimensional collection system that extends to financial information tracking, imposition of additional charges, and exit bans, thereby fundamentally blocking intentional delinquency, asset concealment, and overseas flight, and realizing tax justice."

Through active collection efforts last year, Gyeonggi Province collected 472.1 billion won in delinquent local taxes (118.4 billion won in provincial taxes and 353.7 billion won in city and county taxes) and 139.9 billion won in provincial non-tax revenue, for a total of 612 billion won.

In addition, in last year's "Government Innovation King of Kings" competition, Gyeonggi Province received the Presidential Award (for its innovative performance in delinquent collection by combining precise tracking of virtual assets with an electronic management system for dispositions on arrears), and in the "18th Korea Local Finance Awards" hosted by the Ministry of the Interior and Safety, it received the Presidential Award (for tracking and collecting hidden bonds such as bearer deposit securities) and 1 billion won in prize money (fiscal incentives). In particular, Gyeonggi Province is the only local government in the country to have won the top Presidential Award in the Local Finance Awards for two consecutive years, in 2024 and 2025.

This content was produced with the assistance of AI translation services.